LV Thạc sỹ_Improve the distribution network in Tan viet private enterprise

Chuyên đề thực tập PREAMBLE Consumption is one of the basic and important operations of each business when they conduct business Today, in the market economy, companies use many distribution intermediators with various functions to ensure efficiency in transferring business products to final consumers Thus, for companies to operate effectively, such companies’ leadership must find out ways to manage well their distribution channels to ensure their distribution channels to reach the best efficiency, always give the goods to final consumers in the most convenient way, and satisfy interests of members of the distribution channel Decision on distribution channels is one of the most important decisions which must be approved by a business leadership Distribution channels selected by enterprises shall affect other decisions of mixed marketing policy of enterprises, and affect business activities of enterprises directly Therefore, regular researches to understand the operation of the distribution channel system are essential for any enterprise During the graduation practice at Tan Viet Private Enterprise (Tan Viet PE), I have decided to select the theme: "Several recommendations to improve the distribution network in Tan Viet Private Enterprise" for my graduation thesis The purpose of the theme study is to propose recommendations for the improvement of the product network of Tan Viet PE on the basis of the current distribution system of Tan Viet PE The theme structure includes parts: Chapter I: Overview of Tan Viet Private Enterprise Chapter II: Operation status of the distribution channel system of Tan Viet Private Enterprise Chapter III: Several recommendations to improve the distribution network of Tan Viet Private Enterprise The completed theme may have a few shortcomings due to my limited experience I look forward to receiving the teachers’ assistance in order to complete my theme I would like to thank …, Dean of International Training Department of Vietnam University of Commerce and cadres and staff of Tan Viet Private Enterprise who have helped me during the graduation practice with the completion of this theme! Chuyên đề thực tập Chapter I: OVERVIEW OF TAN VIET PRIVATE ENTERPRISE I Overview of Tan Viet Private Enterprise Process of formation and development Tan Viet PE, is based in the industrial area of Xuan Tien - Xuan Truong - Nam Dinh, is allowed to export and import industrial goods, handicrafts, machines and equipments such as rice threshing machine, concrete mixer, repair and build machines for agriculture Trade name: Tan Viet Private Enterprise Address: Xuan Tien - Xuan Truong - Nam Dinh Head office: Group 18 – Xuan Truong Town – Nam Dinh Tel: 03503.885.308 Fax: 03503.885.711 Tax code: 0600473061 Account: 3205201001957 In Agriculture Bank of Xuan Truong district In the first years, the Enterprise is just a small factory with rudimentary machines to produce rice threshing machines for customers in the local area In 1996, the Enterprise had about 30 workers with the production scale of 500 and also began to sell machines to other provinces in the country In 1998, Deputy Prime Minister Nguyen Tan Dung and his senior delegation visited the production place, encouraged and applauded the enterprises which have made creation and done business in the very local area contributing to the rural growth and country development The year of 2000 was marked by the boom development of the Enterprise as the production scale reached 2000 hectares, of which three factories are located in the industrial area cluster of the commune, with 80 workers With such expanded production scale, the Enterprise has gradually developed its own distribution channel system Also in 2000, the Enterprise cooperated with four other enterprises to set up the Nhat Viet Mechanic Co.,LTD In 2005, the enterprise separated from Nhat Viet Mechanic Co.,LTD to operate independently with the name of Tan Viet Private Enterprise and focused on the research and production of traditional continuous rice threshers In 2011, the Enterprise’s machines are present in the two regions of the country, and sold to China, Laos and Cambodia With the purpose of quality and consistency and long-time experiences in rice Chuyên đề thực tập thresher production, the Enterprise has focused on rice thresher production with various sizes and shapes The products are preferred and trusted by customers in Vietnam, Laos and China Tan Viet rice threshers, are nice-shaped, easy for users, flexible on terrains, bring the high efficiency, and contribute to efficient productivity for farmers Customers of the enterprise Customers of the enterprise are quite diverse and abundant, including individual consumers and organization consumers 2.1.Organization customers The organization customers of the enterprise consist of agents, supermarkets, cooperatives, and farmer associations Products may be purchased for distribution or for consumption purposes The enterprise’s market is concentrated in cities and provinces, mostly in the North Some customers of the enterprise: In Hai Duong: • Hoa Mai co-operative In Ninh Binh: • Kim Son Agriculture Co-operative • Son Long Co., LTD In Thai Binh: • • Cong Thanh Joint Stock Company Viet Han Mechanic Co., LTD In Ha Tay: • An Nam Joint Stock Company • Dai Viet Commerce Co., LTD In Nghe An: • Hoa Binh supermarket • Huong Giang supermarket • Binh Minh supermarket • Nghe An electronics center In Da Nang: • Hoa Phat Phuong Co., LTD • Bai Tho supermarket Chuyên đề thực tập In HCM city: • Viet Tien Co., LTD • Hoa Nhung electronics supermarket 2.2.Individual customers Individual customers of the Enterprise are concentrated in the Northern region They are agricultural households, with good average income, having major rice-growing area Products, are purchased and used in families to serve the needs of agricultural use every year for each crop, save time and effort for families II Inner environment Finance: The infrastructure of Tan Viet PE: Total production area is 2000m2 (Not including the storage area) * The charter capital of the enterprise: Total assets of the enterprise in 2011 is VND 37.437.094.010 Currently: +Fixed capital: VND 11.303.434.970 +Working capital: VND 26.133.659.040 * Results of production and business activities of the Enterprise in recent years: Table 1: Finance situation of the period of 2009-2011 Unit: VND Target Revenue 2009 2010 2011 31.162.348.347 35.787.950.370 35.916.439.320 Corporate income 101.006.212 165.695.669 116.403.394 tax After-tax profit 577.117.838 662.782.674 665.162.253 45.600.000 46.800.000 48.000.000 workers Fixed capital 10.738.263.238 11.020.849.100 11.303.434.970 Working capital Liabilities Sources of the 24.826.976.080 3.918.409.814 25.785.466.250 25.480.317.560 4.021.525.862 26.464.031.150 26.133.659.040 4.124.641.910 27.142.596.050 Average salary of owner Chuyên đề thực tập Through the financial summary of the Enterprise in the period of 2009-2011, we can see the Enterprise's revenue has been quite stable, in 2010, the revenue incresed VND 4.625.602.030 (equivalent to 12.9%) compared to 2009 In 2011, the revenue increased to VND128.488.950 (equivalent to 0.35%) The increased revenue make all other targets such as corporate income tax, after – tax profit, average salary of workers also incresed Some business results of the Enterprise Table 2: Table of production and business results Year Output (unit) Consumption 2009 2010 4142 4757 (unit) 4123 4735 2011 4777 Profit 577.117.838 662.782.674 Revenue 31.162.348.347 35.787.950.370 4752 665.162.253 35.916.439.320 (Source: production and business report) Through the table of production and business results in recent years, we can realize that the revenue has increased gradually and steadily over the years because the economy has revived after the 2008 crisis, the State has many policies to support farmers and businesses The typical policy is to support farmers with non-interest loans Some other demand stimulus packages have promoted product consumption and increased the revenue III.Macro environment Domestic and international economies The domestic and international economic status directly impacts the budget as well as affordability of consumers and therefore, it affects consumers’s decisions of purchasing products in general, electronics products in particular Integration and development have helped our country develop well with quite evident landmarks People's lives are better The standard of living and per capita income has increased significantly and progressively changed customers’ needs and buying habbits In 2009, Vietnam overcame the economic crisis, the electronics market have gone up sharply Signs of economic turmoil in 2010 and 2011 had a great influence on product consumption activities of the enterprise in the electronics industry in particular The inflation increased prices of materials such as: gasoline, electricity, steel so that product price also increases, the trade deficit is coupled with budget deficit, budget spending pressures and public debt are rising along with high government interest, the commercial bank system is accepting excessive risks, the interest platform of the economy exceeds the tolerance of Chuyên đề thực tập enterprises the uncertain stock market contains speculative elements and the status of capital increase is massive but the administration can not catch up with During the difficult economic period, every purchase decisions of customers must be carefully considered Enterprises have cut costs as well as investment in this time The business environment is not favorable affecting almost all sectors and fields 2.Law - policies Political stability of Vietnam in recent years, has created favorable conditions for strong economic development attracting domestic and foreign investors, provides access to large fund sources, and helps the sale of products become easier The government is also completing policies as well as sanctions to support enterprises with business activities The adjustments of the trade law has created a stable legal framework for enterprises to business Especially, the State’s tax support policies create favorable conditions for enterprises Changes of the political and law environment have made investment activities of enterprises become easier and helped them have an access to new technologies and foreign capitals The number of enterprises has increased rapidly in recent years, which not only help expand the market but also contribute to improving competitive activities, consumers have more choices in accordance with their demand and liquidity The economic policies in the current difficult period have shown the government's efforts to stabilize prices and maintain economic activities Efforts to cut bank interest rates and to stabilize real estate are showing good signs so that the electronics market has achieved certain results 3.Impact of sience and technology The development of science and technology affects most stages of production process, creating products with better quality, lower costs and improved labor productivity The rice thresher is becoming more complete The products are becoming smaller with larger capacity Due to the improved technology, each machine is attached with a self-operation set which helps the machine can operate easily on any terrain so that workers may save their time and effort On the other hand, with the boom of science and technology, many kinds of high quality machines with large capacity and many different utilities will compete with the traditional rice thresher Traditional machines will be outdated and replaced by more high-tech ones Chuyên đề thực tập Impact of residents Our country has a populous market, which facilitates the development of electronics products but with significant economic changes, urbanization speed and tends of moving population from rural areas to urban areas are becoming stronger, which makes agricultural land be narrowed gradually and the rice thresher market become smaller Competitive pressure The agricultural machinery market is in the period of continuous growth and change Agricultural machinery is an essential product for the agricultural market in the country and abroad Therefore, there will be many competitive elements for business and production enterprises in this field The Enterprise is operating in an strong competition environment Pressure is not only from the current market but also from companies, businesses preparing to enter the market This thing will make competitive operations in the market get tougher and require companies to quickly gain a position and market share in the market Therefore, the Enterprise must develop a distribution system to have access to all potential customers before new competitors enter the market Here are the basic factors that enterprises will face in the market 5.1 Competition within the industry The Enterprise operating in the environment with enterprises in the same industry can not avoid the competition for market share Models and designs can easily be faked 5.2 Substitutes The demand for agricultural processing machinery in the domestic market is very high and the Enterprise is now competing with products of competitors in the local area and the appearance of harvester-threshers To be able to compete with alternative products, the Enterprise needs to diversify types of products or improve models, industrial designs and product quality SWOT analysis Chuyên đề thực tập Table 3: SWOT Strength - To have the prestige and certain position Weaknesses - Personnel management is not effective on the current market - To have a stable source of capital, the - The technology can not compete with enterprise does not need many loans from high-tech products from abroad banks, not to have suffer interest pressure Management of distribution channels is - To have abundant rural labour not effective - To have young and potential workers Opportunities -The agricultural market in the country is Threats -Material price increases because the rich, the agriculture in the country still inflation is complicated accounts for a large proportion - Chinese products is cheaper with better -The State has adopted many policies to designs support small and medium enterprises - High bank interest rates prevent the The are available suppliers and the enterprise from borrowing money enterprise has good relationships with suppliers - The demand from neighboring countries is high Due to the prestigious brand and product quality put on top, the Enterprise’s products are consumed strongly Therefore, the Enterprise should maintain this advantage If bank interest rates are too high for the Enterprise, the Enterprise should not borrow and try to maintain the stability of capital and production However, the Enterprise still has to invest more in the distribution network to complete product supplying chains because the distribution channels contribute significantly to promoting product consumption In addition, the Enterprise must invest in research to constantly improve the excellence of products in the enterprise’ financial sphere to compete with products of domestic, foreign and potential competitors Chuyên đề thực tập CHAPTER 2: ORGANIZATION AND OPERATION STATUS OF THE DISTRIBUTION NETWORK I MISSION Mission of the business department • To maintain the current business relationships, to receive orders and set up new relationships with planning and organizing working schedules for the existing and potential business relationships • To plan weekly and monthly working plans to report to the head of the sales channel for approval to comply with approved plans • To understand the features, labels, and prices, advantages and disadvantages of products, similar products and products of competitors • To understand the customer contact process and information complaint handling process, information customer receiving and handling process To contact with customers and record all customer information in customer contact reports To report contents of daily sales for the leader of the business team • To take procedures of contract signing, to save the duplicate, to transfer an original copy to the team leader, an original copy to the accounting department if a customer agrees to purchase a product • To make directly delivery and bill procedures • To receive and handle customers’ complaints about product quality, and delivery time • Customer care 2.Tasks of graduate trainee: • From March 20th to April 10th: -To search about the Enterprise - To get familiar with books and paper +To read data and observe working ways of the instructor +To be familiar with types of rice thresher of the Enterprise: price list, freight, warehouse and operation principles of products • From April 11th to June 10th: - To answer customers’ phone, confirm quantity, machine type, mode of transportation and freight Chuyên đề thực tập - To contact with individual customers To resolve issues such as agreement on price, types of product, and retail billing - To write bills of warehouse input and output - To bring customers to the machine warehouse Disadvantages - Initially, due not to used to the work, trainnees may feel quite awkward to handle situations as answering customers’ phone - To have errors of data - Not to be familiar with many specialized terms - To have difficulties when customers ask about technical issues Gained experience: -Exposed to unexpected situations, trainees will become flexible and respond faster -Trainees may learn the working culture of the enterprise -Trainees may know a lot of practical knowledge of business -Trainees will become better in communicating with customers and colleagues II ORGANIZATION AND OPERATION STATUS OF THE DISTRIBUTION CHANNEL Distribution policy target of the Enterprise The Enterprise’s target is to distribute products across the country and export them • For the Northern market Currently, the Northern market is the highest concentration of business agents of the Enterprise with 27 agents of total 54 agents of the Enterprise This thing shows that the Northern market contributes mainly to main product consumption and brings major revenue sources to the Enterprise With such strong consumption, the Enterprise has dominated a market share and had a certain reputation in the North and customers know much of the Enterprise’s products • For Central market: This is a potential market that has not been explored by the Enterprise The Enterprise has 13 agents in the Central market, the demand is very high but the product distribution channel system for this market is limited Therefore, in the near future, the Enterprise must have goals to gradually increase the proportion of consumption and build up a more covered and larger distribution system to reach many more customers Chuyên đề thực tập - Normal: 55% of respondents (intermediaries) expressed that the general operation of the distribution channel is normal This ratio accounts for more than half, showing that the distribution activities of Tan Viet PE have not really been effective and have not created the outstanding points in comparison with other intermediaries - No intermediaries evaluated that the general operation of the distribution channel is ill; this shows the efforts of the Enterprise in securing the normal product distribution and solving problems in the channel These are only the intermediaries’ evaluation of the distribution in Ha Tay market, however, it also helps the Enterprise have the objective assessment of the distribution operations of the Enterprise and understand the demands and aspirations of the intermediaries in the channel b, Evaluation of customers on the channel operations of the Enterprise After collecting and classifying opinions of the 100 different consumer who use of rice thresher of Tan Viet PE, the Enterprise has had their general assessment for the operation of the distribution system Table 9: The level of customer known about the product distribution location of the Enterprise No The number of product sales location The amount of the customers One 49 Two 38 Three Four More than four (Source: Business Department of Tan Viet PE) The level of customer known about the rice thresher distribution location of the Enterprise shows that there are not many customers who know about the distribution system of the Enterprise This will lead to difficulties for customers when making decisions to buy products because they not have the comparison of prices as well as many opportunities to choose the Enterprise's products in sales locations Chuyên đề thực tập Table 10: The most important factors affect the decision to buy the product of the customer No Factors The amount of the customers Introduction of the salesperson 47 Reference from the friends 16 Prestige of trade mark 35 Other factors (Source: Business Department of Tan Viet PE) According to the result of the above table, the most important factor affecting the buying decisions of customers is the consultancy of salespeople On one hand, this reflects the trust of consumers for the understanding of the sales staff and reputation of intermediaries On the other hand, it has also shown the commercial intermediaries have efforts in selling the company's products *Evaluation of consumer on the sales activities and after-sales services of the intermediaries: - 18% of customers satisfied with the sales performance and customer care of the seller Satisfaction comes from the serving attitude of the intermediaries as well as the good product warranty In addition, these customers always receive the assistance and advice when they encounter with the problems in the use of rice thresher - 27% of customers fairly satisfied with the attitude of sales staff and product warranty service - 53% of customers felt that the company's services have been normal They not really care about the services of intermediaries - 2% of customers unsatisfied with after-sales services of intermediaries Causes for their dissatisfaction come from the arising problems in the using process and these problem are not resolved reasonably by the intermediaries This sample size is small and not representative for the entire company's market However, the opinions of consumers is important to the company overall assessment of the performance of intermediaries, especially retailers and agents of the company c, Evaluation of the Enterprise of the channel operations • Achievements: By analyzing the situation of distribution policy of Tan Viet PE, the following success can be seen: - The Enterprise has established a wide distribution system throughout the country to perform the target of expanding the market Chuyên đề thực tập - The Enterprise has built a relationship with channel members and initially has had the prestige for these members - Incentive activities for channel members have created the driving force for channel members to try to achieve the distribution target -Thus, the applying product distribution policy of the Enterprise relatively effective in the practice The advantages of this policy need to be continuously promoting to make new strides in improving efficiency and operation quality of distribution system of the Enterprise • Limitations Besides the successes, the current distribution policies of the Enterprise have been still certain restrictions: The operation management or flow management in the channel has not been good; especially the information flow has not been paid attention to construct, resulting in not making the two-way effective relation between channel members The Enterprise has not developed a consistent channels form yet The usage of traditional distribution forms have caused difficulties for the administration and management of distribution channels such as lack of centralized leadership, inefficient operation channel, high costs and risks for channel members Degree of association among members is low, operating for the specific target rather than for the target of the entire channel At the psesent, the combination with other tools in the marketing mix has not been good, leading in difficulties to achieve these planned targets Product policy has not reflected the customer demands and has not based on the members’s opinions in the channel That providing information on products to channel members has not been done well and the channel members have been quite passive in receiving information Current price policy has various disagreed problems and price management has encountered many difficulties, especially the retail price The Enterprise has not paid much attention to the promotion activities, television advertisements, magazines, internet, promotions, and customer service to be popular for the customers The market research activity has newly developed and has not been attached special importance to Although there have been the strong sales forces, there has not been appropriate incentive methods to increase consumer product efficiency The Enterprise has lacked a fully professional and experienced force in operation management of the channel The level of channel management force and sales team of the Chuyên đề thực tập enterprise and the intermediaries is limited The Enterprise has not had the policy to provide additional training and specialized training for this force 6.2.3 Causes The Enterprise has not had the separate marketing department, neither the staff with professionally trained qualification nor building the effective operation management team of channel In the stressfull working environment wth the requirement of high specialization, the department must perform many functions, leading in the restriction of quality, creating high pressure to the management force and reducing the quality of work All distribution activities have been performed by personnels of business department who are inexperienced in managing distribution The Enterprise has had no program and operation plan as well as budget for the channel activities The Enterprise has had no information systems as well as marketing operation support systems Most enterprise‘s decisions have been based on secondary data sources and the subjective prediction rather than basing on the customer's demands as well as consultation of the channel members The Enterprise has not had the complete distribution strategy as well as the development of specific indicators for evaluation of each channel Evaluations of channel members have been unprofessional because the Enterprise has had no team of staff with sufficient evaluation expertise and experience and had no suitable evaluation standard system, affecting the operation of the product distribution of channel members and the Enterprise So in the next time, it is necessary for the enterprise to find remedies to improve the distribution system which the Enterprise has chosen ***FINDING THE MATTER IN DISTRIBUTION ACTIVITY OF THE ENTERPRISE - By the above comments, a number of issues regarding distribution activities are set for Tan Viet PE are as follows: - The Enterprise is lacking of parts, the staff with the understanding about marketing activities, and the present staff lacks of experience and expertise in channel management - The Enterprise has not had the separate budget for operation of the channel - The company should develop marketing support systems, carrying out market-research as a basis for decisions channels - The evaluation activities lack of profession CHAPTER III: Chuyên đề thực tập SOME RECOMMENDATIONS TO IMPROVE THE DISTRIBUTION OF THE ENTERPRISE I The meaning and target of distribution channel improvement Meaning of distribution channels improvement The well-developed distribution network will increase the product market outlet of the Enterprise The distribution network is a combination of many different distribution channels and each distribution channel will have a certain number of members are distributed over many different market areas to hasten the process to bring products to consumers Organizing and maintaining multiple distribution channels allow the enterprise at the same time to access many different markets and to meet the demands of its clients The construction of distribution network is to increase the competitiveness of the enterprise in the market The distribution network is responsible for collecting and providing for the Enterprise information of competitors and the level of competition in the market so that the Enterprise can take the initiative in implementing the marketing mix measures In one hand, the well-organized distribution network will help customers to purchase more conveniently and select the products of the enterprise as well as building a positive image of the enterprise On the other hand, the well-organized distribution network will reduce costs by intermediaries who have experience in sales, so that commodity prices can be partially reduced and competitiveness is increased The creation of distribution networks is to implement the specialization process; therefore, the manufacturers can concentrate on researching and manufacturing products to serve consumers without concerning about selling products on the market The intermediate distributors are specialized, so they have conditions to access and develop the target market They have extensive experiences in selling, as the result; the products will be distributed efficiently The target of distribution network improvement Nowadays, the manufacturers is using more and more the intermediaries in the distribution network because the intermediaries sell the products and services more effectively in comparision with the manufacturers However, each intermediary participating in the distribution channel has its own targets to pursue, so to achieve the common goal of the channel, there must be cooperation between the members and sometimes the members have to give up their target Although the members are interdependent, they operate independently for the best short-term interests This increases the conflicts and reduces the operation eficiencies of the channel Therefore, Chuyên đề thực tập the channel management organization must initially ensure to resolve well with arising conflicts and to solve harmoniously the relationship between the channel members In addition, the distribution network improvement aims at the purposes are as follows: - To improve efficiency of production and business, giving priority of increasing revenues and profits - To ensure that the goods is supplied timely to consumers with sufficient quantity, right quality and ensure that consumers can buy goods with the most favorable conditions - To make sure that the market share of the Enterprise is maintained - To make the most of facilities sales network of intermediaries II Several recommendations for distribution channel improvement Channel contruction improvement The Enterprise should develop possible channels in order to increase the capability to access the market For direct distribution channels: the Enterprise should use the experienced sales and combine with direct marketing This is a developed market trend It allows buyers to more easily purchase products without meeting the seller directly Apart from buying through stores, mail order by phone fax, the enterprise can develop the sales activities through the catalog and internet For the channel in the same level: the Enterprise should only apply in certain neighborhoods to ensure time and cost The multi-level channel should be widely developed, especially in the northern area The width of the channel: the company should expand the market by increasing the number of intermediate with the principle of the least the number of agents, more wholesalers and 2.Organization and operation improvement of the channel If the Enterprise wants to manage well the operation of the channel, the enterprise needs to manage well the flows of the channel Material distribution flow: It is necessary for the Enterprise to ensure that distribution activities are carried out safely, on time and location The enterprise needs to reduce the duration of storage or transportation The Enterprise can hire a carrier to save time as well as encouraging the agents, large wholesalers executing this work The information flow: The Enterprise needs to identify the necessary information when exchanging information between the channel members This information is not only as output, sales figures, Chuyên đề thực tập inventory levels but also the feedback from customers, reflecting the channel members, market information, competitors, accurate and timely two-way exchange information… The innovation of intermediate selection mechanism In principle, the agent is entitled to act as intermediaries on behalf of the enterprise in organizing the activities of consuming products, so the selection of intermediate types must be very tightly For the agents under the enterprise To be able to recruit the qualified agents which can take better sale of goods is not only based on financial capabili ty of agents, but also pays attention to other various criterias such as the location of agent and warehouse, the relationship between the agent and other intermediaries such as wholesalers But at the present, the demand for threshing machines in the country and its neighbors is high, there are many advantages in consuming products Consequently, the enterprise has not really paid much attention to selecting distribution agents The unit which wants to be an agent of the Enterprise only needs to prove the solvency and business conditions There is no the evaluation and verification of other conditions such as the storage system of agent and material support for consuming products So to build an enough strong and effective legal basis to build effective distribution system with high efficiency, the Enterprise needs to change the following things: With conditions to become an agent or shop of the Enterprise, the standard of storage area, facilities, financial capability, salesperson’s qualification need to be specified by the specific numbers or requirement for the specific certificate Depending on the agent level and the market scale in the place of the agent, these criterias are different As for the dealer's responsibility to the Enterprise, it is necessary to make a closely contract, premeditating damage which can occur when the agent violates in order to make the appropriate penalty value, the importance of the order Especially in the "returned goods" matter, the Enterprise should require agents to find out the reason why the customer returns At the end of the month, the agent has to inform all the information about the quantity and condition of goods and the reason that the goods is returned and all the relevant documents to enterprises If the reason for return of product is that the quality is not satisfactory, the error from the Enterprise , the agent will be refunded the money If the agent does not preserve, transport products well, damages the product, changes the quality of goods, leading in returned goods; the Enterprise will not pay the money for retuned goods and the agent has to be self incurred the damage Chuyên đề thực tập If the fault lies in the order contracts, the wrong party shall be responsible and to be fined under the previous agreement The improvement in market share objectives In recent years, the Enterprise has wanted to expand the scope of market activities, to take the Enterprise’s product in many provinces in the country especially in the export market For the northern market: This is the most important market of the Enterprise Therefore, it is necessary to consolidate and develop this market further more Currently, competitive activities in the market are very fierce so the enterprise should have the appropriate marketing policies Distribution system needs to rapidly improve to maintain and improve competitiveness for the Enterprise For the Central Market: This market is the one that the Enterprise has not achieved much success Currently, there are only four agents of 34 agents of the Enterprise in this area Therefore, in future the Enterprise needs to invest more in this market, increasing the number of intermediaries and improve the consumption in this area For the southern market: This is also the potential market, but the Enterprise has not been took much much advantage The products of the Enterprise in this market accounts for only about 28% In the future business needs for greater access by building wider distribution system Improvement of distribution channel management 5.1 Incentive activities improvement for channel members Activities to encourage the channel members have a very important role because they will affect the cooperation between the Enterprise and the channel members If such activities are done well, they will motivate the channel members To complete this work, the Enterprise must: Strictly implement the regimes for the channel members Doing this well is very important because it makes the members trust the Enterprise These activities are applied to not only enterprises with good business results but also members implementing well the regulations proposed by the Enterprise: right price, good product preservation… Diversify forms of praise and bonus: in addition to forms of material incentives applied, the Enterprise should take measures such as: - To support information, assist and share with the agents on promotion activities - To pay attention to and encourage the channel managers - To perform training courses on management skills for critical parts of the channel Chuyên đề thực tập - To have financial and material support for the agents who have contributed to the Enterprise’s product consumption and improvement of the channel quality 5.2 Improvement of evaluation of operations of the channel members The Enterprise needs to train or use people who have experience in evaluating operations of the distribution channel and understand about distribution operations of the Enterprise Moreover, they must be experts on the market to well this work Evaluation must be implemented frequently and periodly every quarter and every year It is required to organize and carry out efficient evaluation of operations of the distribution channel to define the channel structure and make decisions on selecting members of the channel as well as measures to promote channel administration It is required to continuously adjust development plans of the distribution channel system as well as frequently activities of the whole system As mentioned, disadvantages of the distribution channel of the Enterprise are that an evaluation criteria system of members’ operations has not been built Therefore, the Enterprise needs to build an evaluation criteria system for activities of agents specifically and exactly When the Enterprise well this work, the Enterprise can make right decisions on building norms of commending and rewarding, encouragement or punishment for members of the channel Besides quantitative standards such as revenue, growth speed of selling quantity over time, product in stock, selling ability, the Enterprise must care qualitative standards as cooperation attitude, service quality…To evaluate more specifically, the Enterprise can use methods of giving marks to agents At first, the Enterprise needs to define what an important norm distributive activity needs to gain is and its importance level with distribution and mark issuing activities Finally, the Enterprise will have score-board to evaluate members The result of this testing and evaluating will be applied base on suitable, equal behavior and opened with all members of distribution channel However, evaluations of members have to be agreed by members so that efficient evaluation activity is carried out effectively The Enterprise should exchange idea with members and consult their ideas before implementing this activity Considering to coordinate with marketing mix policy The Enterprise need to coordinate with the activity of other marketing tools such as, products, price and merge with decision on distribution channel 6.1 Product policy completion Chuyên đề thực tập In greatly competitive market as today, it is requested that the Enterprise need to improve continuously and provide with new products to meet the demand of market and customers We can find that need from neighboring countries is high and potential However, the Enterprise cannot stop with products, types, size as today because current Chinese enterprises carry out well that Chinese products have a lot of types, color, and different size which is suitable with customers’ require Therefore, the Enterprise has to try to diversify types, and improve product quality Besides, improvement of ability and standard of t staffs, the Enterprise need to take full advantage of knowledge of market of the members in distribution channel The Enterprise need to promote them to search information and give the information to the Enterprise about market, customers’ needs, and information about competitors The Enterprise is the person who maintains the retail channel, contact direct with customers, listen to and collect customers’ ideas to improve the products and complete product provision effectively 6.2 Price policy improvement Fix price is an important decision related to revenue of the enterprise The Enterprise need to control the selling price of channel members and find the way to adjust the price suitably; not allow to happen unequal price between members in the same level The price level has to have ability to compete on the market, ensures profit and prestige of the enterprise, quality of product Price structure need to remain in the price frame and has to reflect the dynamic change of the products Because the nature difference of the members in the channel, trade intermediate who directly to buy goods form the enterprises such as agents, wholesalers need to have specific price policy with each unit The Enterprise will have the different prices between these units, which depends on buying quantity, payment ability The Agents and wholesalers can buy with the lower price 6.3 The activity of combined promotion improvement The Enterprise needs to care more about the promotion activity in the channel The Enterprise needs to spend their budget suitably for this activity The Enterprise is also necessary to take part in more advertising fair, product display nationwide and abroad in the potential market about products of the enterprise The Enterprise needs to investment more in advertisement to access to the large markets such as newspaper or television The Enterprise needs to give more information about products, provision line of website of the Enterprise, updates and changes continuous to have new information for the customers Chuyên đề thực tập The Enterprise should not discount on the product , instead of that the Enterprise should have measures to help and encourage individual customers 6.4 The marketing support measures 6.4.1The market research activity The market research activity plays an important role in the business activity of the Enterprise because it provides the Enterprise the basic in making decision and building the strategy as well as long term and short term plan Because the Enterprise does not appreciate the importance of this activity, the market researching is not specialized At first, the Enterprise can perform the small scale market The Enterprise can study the needs and evaluate the satisfying level of the customers through agents by providing agents the general question form which the customers can answer With the organization customers, the Enterprise can carry out thanks to the sale staff This market research activity can be implemented yearly at the time the Enterprise can order to implement 6.4.2Personnel activity At present, the Enterprise has not had the marketing room and the members of the sale office are implementing the marketing activity Beside of the sale activity each member in the room has to manage the activity of the agents in the different areas However, the staffs are young and lack of experience as well as professional knowledge in the management of the channel Therefore, the Enterprise needs to have policies to develop the working staff with enough ability to carry out marketing well and the channel management The Enterprise can help the working staff take part in short term training class in one or two week with the people having the experience in the distribution, experts or organize the exchange meeting between the workers in the office This activity helps the workers have the basic knowledge about the activity of the distribution channel, sharing experience, potential difficulties, problems, and the most suitable solutions 6.4.3.The financial support The Enterprise needs to have the own budget to remain the activity of the channel At first, the Enterprise needs to guess all the remaining costs and arising expenses in the activity process of the channel In the budget, the Enterprise is necessary to indeed the different payments such as bonus for agents, the supporting money for the sale workers, training cost and staff training …This helps the Enterprise to be active in cost forecast and will create conditions for the workers to make the decision in arising situation Chuyên đề thực tập 6.4.4.The organization structure Because at present all marketing activity of the Enterprise is implemented by the sale office, there are many limits The Enterprise should have an office specializing in marketing and distribution This office can include participants to take part in the marketing management process, giving plan, implementing, testing, and supervising They are people who have careful training, experience in the market activity 6.4.5.The other marketing measures Besides the following measures, the Enterprise needs to develop marketing support system to ensure the effectiveness for the management activity of the distribution activity of the Enterprise This system takes part in and access to all activities of the Enterprise Marketing support system includes: Plan system, marketing information system, marketing test system, marketing controlling system The Enterprise needs to care the information system In the activity process, the steering committees need to have different information This information is used to be the basic for the activity of the Enterprise This system is to collect, diversify, analyze, and provide the new information for the boards of managers The information system of the Enterprise includes: The internal report system The internal report system provides the information about economy, finance which has special significance with the business activity of the Enterprise The information is provided fully, exactly from the offices in the Enterprise The outside information collecting system The outside information collecting system has special significance with the activity of the Enterprise, especially the information about customers As a result, Chapter III gives some measures to improve the distribution channel system of Tan Viet PE Although the above measures are not detailed and completed, we still have an overall view of necessary work and meaning as well as benefits of them when they are implemented The Enterprise can refer to and select suitable measures with the ability of the Enterprise Chuyên đề thực tập CONCLUSION In this thesis, I have mentioned some issues on the status of administration activities in distribution systems of Tan Viet PE in the period of 2009-2011 Distribution channel system and its administration activities is a very important issue, contributing largely into the consumption and improving the efficiency of production and business activities of the enterprise In the previous time, the enterprise faced with difficulties in the domestic economies, so the expansion of production and consumption of the enterprise has met many difficulties Therefore, during my internship in Tan Viet PE, I have studied in depth the situation, the shortcomings and offer bravely some solutions to improve the distribution system to promote the consumption mission of Tân Viet PE Because of the limitation of experience and knowledge on the complex issues of administration field, my thesis also has the shortcomings Hopefully, I will receive comments and contributions from the teachers and Management Board of Tan Viet PE to improve my graduation practice thesis I would like to send the most sincere thank for the whole-hearted instruction of Mr …and the whole-hearted support of the officiers in Tan Viet PE creating the favourable condition for me to complete this graduation practice thesis Chuyên đề thực tập TABLE OF CONTENTS Chapter I: OVERVIEW OF TAN VIET PRIVATE ENTERPRISE Chuyên đề thực tập Chapter I: OVERVIEW OF TAN VIET PRIVATE ENTERPRISE Chapter I: OVERVIEW OF TAN VIET PRIVATE ENTERPRISE ... the right material awarding method 5.2 Using the combination of other tools in marketing-mix The Enterprise has initially used the tools of marketing – mix to combine with the operations of distribution. .. 35 Other factors (Source: Business Department of Tan Viet PE) According to the result of the above table, the most important factor affecting the buying decisions of customers is the consultancy... operating for the specific target rather than for the target of the entire channel At the psesent, the combination with other tools in the marketing mix has not been good, leading in difficulties to